Creating Plan-O-Grams That Work

Any discussion about plan-o-grams probably needs to start with a description of what they are.

A plan-o-gram is a detailed diagram of a shelf, display, fixture, or section showing the space occupied and location of each product that is to be merchandised there. As the intent of a plan-o-gram is to maximize the sales and profit per square foot, the space allocated to each product and the location that it occupies should be based on the consumer demand for that particular product, (the historic or expected sales), and consumer buying patterns.

When plan-o-grams are produced by category management professionals, they try to first gather as much of the following information as possible about the category:

The importance of the category to the overall business and the amount of space available.

The type and size of the merchandising displays that will best display the product and that are available.

The consumer trends that are affecting the category, whether it is growing or declining, and any information about how consumers shop the category.

The unit and dollar sales for all of the items available in the category.

The size of each product, and the frequency with which the product is replenished.

When all of this information is available it is then used to determine:

The size of the overall section.

The type of fixtures and displays that should be used.

The products that must be included and the products that need to be discontinued.

The specific space that will be allocated to each item and the location of that item on the display.

In addition to the above there are some over-riding principles that must be followed to create plan-o-grams that maximize sales:

The best selling products must be located in the best selling position on the display. (That is the space that is most easily seen and shopped by your customers) The principle here is that consumers have very little time to make a selection decision so you want to have your highest demand, most popular product where it can be quickly located and purchased.

The space that a product occupies must be in relation to its importance in the category. (If the Players brand generates 25% of the cigarette sales it should have 25% of the space allocated to cigarettes.)

Brand families wherever possible should be kept together.

There must be enough space given to an item to create a visual impact. (Some products are in very small packages and more than one facing may be necessary for it to be easily seen.)

Using this approach, what can you do to create plan-o-grams for any category in your store?

First, determine the proportion of your sales that the category currently represents, and compare that to any industry or competitive data you can find to determine whether it is over or under performing.

Second, establish an objective of what portion of your business you want the category to achieve.

Third, determine based on the characteristics of the category, (is it an impulse category or a planned purchase category), and based on those factors, where it should be located in your store and the amount of space it should occupy.

Next, review the items sales, in units and in dollars of every item in the category to determine the best sellers and the products that should be discontinued. If your records are not sufficient, you should turn to trade publications and the statistics they publish, or to your supplier or wholesaler for the information. Note, you may find that there are some “best selling” products that you have not been carrying and that you should add to your product mix.

Once you have rationalized your assortment, you can then begin to place the products on the fixtures or shelves, remembering to put the best selling products in the best selling location, and group families of products together.

Although you will find that this is not a simple exercise it is an important one if you are to better satisfy the needs of your customers and improve the sales and productivity of your store.